How The Money Is Spent

The U.S. was richer in products, technological talent, material and hard cash than ever before in history. But there was a limit even to its fabulous wealth. How far could its federal Treasury go in meeting all that was expected of it?

Budgetary experts are now working on what will certainly be the biggest U.S. budget in peacetime. If present Administration policies are carried out, the U.S. will have to figure roughly on spending some $43.4 billion in the fiscal year which begins next July 1. No final figures have been set, but on the basis of current proposals these items must be met:

P: $15 billion for national defense--the ceiling set last summer by Harry Truman. Military leaders are certain that this is inadequate.

P: $7 billion and up for foreign aid, including $5 billion for ECA in Europe, $1 billion for military lend-lease to Western Europe, $1 billion for aid to Asia.

P: $6 billion for veterans' services and benefits--a fixed item.

P: $5.4 billion for interest on the $252 billion national debt.

P: $10 billion for all other expenses, such as social welfare, conservation, transportation and communication, running the Government.

Tax experts predict that the Treasury will take in at least $43 billion in fiscal 1949. To finance its tentative program for 1950, therefore, the Administration can reasonably count upon just about enough revenue. But this program contains very few of the broad social welfare objectives advocated by Harry Truman in his campaign.

The President is as determined as anyone to keep the budget balanced. Secretary of Commerce Charles Sawyer, dressed in dove's clothing and holding out an olive branch to the National Association of Manufacturers (see BUSINESS), nevertheless hinted that corporation taxes, if not taxes on big personal incomes, would have to go up.

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